Natural Gas Price Fundamental Daily Forecast – 15-Day Forecast Remains Supportive Ahead of EIA Report

Natural gas futures are inching higher on Thursday, shortly before the regular session opening at 13:00 GMT and the release of the latest government storage data at 15:30 GMT. Earlier in the session, the market dipped on follow-through selling related to yesterday’s second consecutive decline as weather models back off the upcoming winter blast targeting the Lower 48.

At 12:28 GMT, March natural gas futures are trading $2.814, up $0.025 or +0.90%.

Near-Term Weather Forecast

The 15-day forecast remained strongly supportive, according to NatGasWeather. The Global Forecast System (GFS) and the European model still are a massive 70-plus heating degree days (HDD) colder than normal, it said.

NatGasWeather went on to say the overnight weather lost a few HDDs for this coming Sunday and Monday, according to the forecaster, but “made up for it” by trending further colder with a second reinforcing Arctic shot February 10-14. The most recent GFS data maintained the Arctic shot across the northern United States this weekend but wasn’t quite as cold across the southern and eastern part of the country.

However, the GFS trended even colder beginning late next week through mid-February as a second reinforcing Arctic blast is forecast to spread “aggressively” across the country. The European model’s afternoon run was in agreement.

Regarding Wednesday’s price action, NatGasWeather said sometimes natural gas market price moves ‘don’t make sense after huge breakouts, as prices often retrace more than what should be expected.”

US Energy Information Administration Weekly Storage Report

According to Natural Gas Intelligence (NGI), today’s EIA report is expected to show a withdrawal close to 200 Bcf.

“A Reuters poll of 18 analysts produced estimates ranging from withdrawals of 202 Bcf to 172 Bcf, with a median decrease of 193 Bcf. A Bloomberg survey and a Wall Street Journal poll also showed estimates within that range, with both producing a median 194 Bcf decrease. NGI modeled a 197 Bcf pull,” NGI wrote.

The EIA recorded a draw of 155 Bcf during the similar week a year ago, and the five-year average withdrawal stands at 146 Bcf for the period.

Daily Forecast

The main trend is up according to the daily swing chart. A trade through $3.005 will signal a resumption of the uptrend. This could trigger an acceleration to the upside with $3.320 a reasonable upside target. The main trend will change to down on a trade through $2.554.

The three-month range is $3.320 to $2.268. The market is currently straddling its 50% to 61.8% retracement zone at $2.794 to $2.918. This zone is controlling the near-term direction of the market.

Look for an upside bias to develop on a sustained move over $2.918, and for a downside bias to develop on a sustained move under $2.794 with $2.637 to $2.550 a potential downside target.